Wage premium of fatherhood and labor supply in Japan

Abstract

Using data from the Japanese Panel Survey of Consumers (JPSC)1994-2006, we
examine the effect of child birth on fathers’ wage rates and labor supply in Japan.
We also compare effects of fatherhood among different cohorts by dividing the JPSC
sample into two birth year cohorts (born in or before 1960 and born after 1960). We
find that birth of child significantly increase hourly wage rates by 2.8 percents and
annual work by 65 hours. Comparing with results in the U.S. (Lundberg and Rose
2002), the effect of child birth on labor supply is large but the effect on wage rates are
relatively small in Japan. We also find that child birth have different impact on labor
market outcome between the early and the later cohorts. In the early cohort, birth
of child significantly increases wage rates but has no significant effect on labor supply.
On the contrary, birth of child does not increases wage rates but significantly increases
labor supply in the later cohort. Finally, we examine how gender difference of children
matters. Although the impact of gender difference is not so large, the effect of birth of
sons is larger than the effect of birth of daughters.